Australian Red Cross Society (Red Cross) Summary

[2021] FWCA 5945

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Australian Red Cross Society (Red Cross)
(AG2021/7466)

AUSTRALIAN RED CROSS (WA DIVISION) CERTIFIED AGREEMENT 2006

Health and welfare services
COMMISSIONER WILLIAMS	PERTH, 22 SEPTEMBER 2021

Application for termination of the Australian Red Cross (WA Division) Certified Agreement 2006

[1] This decision concerns an application made by Australian Red Cross Society (Red Cross) (the Applicant) for the termination of the Australian Red Cross (WA Division) Certified Agreement 2006 (the Agreement).

[2] Schedule 3 item 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provides that Subdivision C of Division 7 of Part 2-4 of the Act applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.

[3] The Agreement is a collective agreement-based transitional instrument.

[4] This application is made under section 225 of the Fair Work Act 2009 (the Act).

[5] This section of the Act allows an employer to apply to the Commission for the termination of an agreement that has passed its nominal expiry date.

[6] Section 226 of the Act, set out below, details the considerations for the Commission when dealing with such an application.

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[7] The Applicant has provided, in support of its application, a statutory declaration from Mr Peter Antal (Mr Antal), the People & Culture Manager of the Northern Territory and Western Australia for the Applicant.

[8] Mr Antal states that the Agreement reached its nominal expiry date on 1 November 2009.

[9] Mr Antal states that, should the Commission terminate the Agreement, the employees of Red Cross in Western Australia will be covered by one of the following modern awards:

• Social, Community, Home Care and Disability Services Industry Award 2010;

• General Retail Industry Award 2020;

• Educational Services (Post-Secondary Education) Award 2020; and

• Storage Services and Wholesale Award 2020.

[10] The Applicant states that Red Cross has consulted with its employees covered by the Agreement and the Australian Services Union Western Australian Branch (the Union) regarding this application to terminate, so that they could express any views regarding the effect of terminating the Agreement.

[11] Mr Antal conducted information and consultation sessions with West Australian employees on the below dates:

• 27 July 2021;

• 28 July 2021; and

• 29 July 2021.

[12] Each session briefed employees on the proposal to terminate the Agreement after its nominal expiry date, including the key differences between the Agreement and relevant modern awards. Each session provided employees with an opportunity to provide feedback or ask questions.

[13] Prior to each consultation session Red Cross emailed employees a document pack, consisting of:

• a letter regarding the proposed termination of the Agreement, which included a number of channels that employees could seek further information through or express any views;

• a Frequently Asked Questions document;

• a document setting out the Key Differences between the Agreement and the relevant modern awards, including those terms and conditions Red Cross will retain that are more favourable to staff; and electronic links to copies of the Agreement and the relevant modern awards.

[14] The consultation period commenced on 26 July 2021 and concluded on 5 August 2021 (Consultation Period).

[15] Mr Antal states that no employees expressed any views nor provided any feedback to Red Cross regarding the application to terminate the Agreement during the Consultation Period.

[16] Mr Antal sent an email to Mr Paul Cecchini of the Union on 29 July 2021 to advise the Union of the proposal to terminate the Agreement. The 29 July 2021 email invited the Union to express any views regarding the termination of the Agreement during the Consultation Period

[17] To date, as stated by the Applicant, the Union has not expressed any views regarding the termination of the Agreement.

Consideration

[18] I am satisfied that termination of the Agreement is not contrary to the public interest.

[19] Taking into account the views of the employer and accepting the Applicant’s statutory declaration that the employees currently covered by the Agreement will be covered by one of the abovementioned Awards, I do consider in the circumstances here that it is appropriate to terminate the Agreement.

[20] Accordingly, the Australian Red Cross (WA Division) Certified Agreement 2006 is terminated and pursuant to section 227 of the Act, the termination is to take effect on 8 November 2021.

Printed by authority of the Commonwealth Government Printer

In the Fair Work Commission, the Australian Red Cross Society (Red Cross) applied to terminate the Australian Red Cross (WA Division) Certified Agreement 2006. The application was made under section 241 of the Fair Work Act 2009. The Red Cross sought to terminate the agreement due to significant changes in its operational model, including the introduction of new technology and the adoption of a new business model. The Red Cross argued that these changes rendered the agreement inoperative and that there was no longer a significant body of employees covered by the agreement.

The legal issues before the Commission included whether the Red Cross had satisfied the requirements of section 241 of the Fair Work Act to demonstrate that the agreement had become inoperative, and whether the changes in the Red Cross's operations warranted the termination of the agreement. The Commission considered evidence from both the Red Cross and the relevant union regarding the impact of the changes on the workforce and the operation of the agreement. The Commission also considered the broader implications of the termination of the agreement for the employees and the Red Cross's operations.

The Commission found that the Red Cross had satisfied the requirements of section 241 of the Fair Work Act to demonstrate that the agreement had become inoperative. The Commission noted that the changes in the Red Cross's operations had resulted in a significant reduction in the number of employees covered by the agreement, and that the agreement was no longer fit for purpose. The Commission also found that the termination of the agreement was in the best interests of the Red Cross and its employees, as it would allow the Red Cross to adapt to the changing operational environment and ensure that its employees were paid and conditions were provided for in a manner that reflected the current realities of the organisation. The Commission therefore granted the Red Cross's application to terminate the agreement.

The Fair Work Commission terminated the Australian Red Cross (WA Division) Certified Agreement 2006, effective from the date of the decision. The Commission noted that the termination of the agreement would not result in any immediate changes to the terms and conditions of employment for the affected employees, as they would continue to be governed by the terms of the agreement until it expired. The Commission also noted that the Red Cross and the relevant union would have an opportunity to negotiate a new agreement that reflected the changed circumstances of the organisation and its employees.

Australian Red Cross Society (Red Cross)

Consideration

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established